Agricultural trade liberalization and poverty in Tunisia : micro-simulation in a general equilibrium framework

Abstract EN

This study tries to answer the following questions: Will exposure to world agricultural prices raise or lower poverty? To what extent will households be affected by changes in agricultural trade polices? Do multilateral agricultural liberalization policies matter more than bilateral changes? Results of simulations using a computable general equilibrium (CGE) model linked to household survey data suggest that trade liberalization has only modest effects on the level of GDP, but it has a substantial effect on reducing poverty.

Moreover, the combined effects of global and domestic liberalization are more pro-poor than the effect of domestic liberalization alone.

As a net importer of agricultural commodities, Tunisia may experience terms-of-trade losses from higher world agricultural prices.

However, given Tunisia’s significant agricultural import protection policies, it is expected that the agricultural sector will incur losses from trade liberalization that removes this protection.